I think we will find that a major, if not the predominate use of BTC, will be as a store of value. You know, the _other_ function of money. Using BTC for ordinary and "legal" trade has a blizzard of intractable problems with no obvious (to me) benefit. How is BTC better than Paypal if you plan to obey the "law" ?
1) Bitcoin transfers are cheaper.
2) Bitcoin gift transfers do not require that both parties are registered with the same website.
3) Bitcoin does not discriminate against users who live an certain countries.
4) It's impossible to violate the terms of service or policies of Bitcoin.
5) If you are from certain countries, using Bitcoin doesn't contribute to the tax base of your perceived (true or not) oppressor or occupier nation.
6) Bitcoin transactions between two people can occur off of the Internet altogether, as there is no server necessary to actually perform the transaction.
7) If you are the vendor, Bitcoin won't take back your sales revenue because someone says their account was hacked or because they claimed that you defrauded them; nor can Bitcoin reverse any transactions for any reason without your consent.
Bitcoin won't submit tax reporting on you if you exceed $600 in sales in a single year.But you're right, there is no obvious benefit to using Bitcoin over Paypal for legitimate transactions, to you.
I agree with all the above... but Bitcoins would be so much better if I didn't lose 1/5 of them at Mtgox.